A GROUP of independent financial advisers has asked the Government for funding to provide a service to assist people struggling withsevere debt problems.
The Future Group, which was founded 18 months ago by several Munster-based financial advisers, claim there is a gap in current services for people with complex debt and the self-employed who are not catered for by the Money Advice and Budgeting Service.
The group’s spokeswoman, Frances O’Hanlon, said they had already received positive feedback on their proposal from a number of members of the Cabinet including Finance Minister Brian Lenihan.
“People are under tremendous financial stress and strain leading to family breakdown, mental illness and suicide. They are afraid of the banks, their power and what they are capable of doing. They are terrified at the prospect of their business failing, losing their family home or the family farm,” said Ms O’Hanlon.
She told a meeting of the Joint Oireachtas Committee on Economic Regulatory Affairs that the extent of the problem was difficult to quantify. Ms O’Hanlon claimed there was very little data available on the number of people who had used their family home as collateral to fund investment properties. She noted many independent financial advisers were already providing assistance for free but the situation could not continue indefinitely.
“We are not Robin Hood but people are in a very grave situation. Some people have no way out and something needs to be done,” she told TDs and senators.
She also warned debt management companies were flourishing in an unregulated market where many were charging exorbitant rates. In one case, she said a firm was charging a client 37% of her total debt repayments in fees.
Ms O’Hanlon said the group would like to see a procedure where cases were referred to them by MABS, although she later admitted they have had no formal contact with MABS on their proposal.
However, she pointed out that MABS’s services were already overstretched with handling 28,000 cases per annum. The group are offering to approach the banks on behalf of clients to help them manage debt.
They are calling on the Government to fund their initiative through financial advisers being paid a fee by either the state or the Financial Regulator.
However, Shane Ross criticised the Future Group’s presentation on the basis that it lacked detail about the level of funding required, while Fianna Fáil TD John O’Donoghue said the idea was not possible to implement at present as it had no cost structure.
© Irish Examiner Ltd. All rights reserved